Is a ‘retirement roommate’ right for you?

Created date

July 26th, 2019

Housing is the largest line item in most people’s budgets. Once you reach retirement, you may be looking for ways to shrink your housing costs. One creative way to do that is to take in one or more roommates. Wendi Burkhardt, CEO of Silvernest (silvernest.com), an online roommate-matching service for Boomers and retirees, says home sharing is an attractive option as people are enjoying increasingly long retirements of 20 years or more.

Pros

“By renting out unused rooms in their homes to compatible, long-term housemates, they earn approximately $10,000 a year in extra income, which is about the same as what they might make working a part-time job. They also benefit by splitting the bills and chores with someone else,” Burkhardt says. “Many also enjoy the companionship that comes with living with others.”

It’s not only rental income and splitting utilities that can make home sharing an attractive financial proposition for retirees. Brian Davis, cofounder at SparkRental.com, a site with resources for landlords, says retirees may want to consider younger roommates who can help with household chores.

“A younger roommate could do the more physically strenuous house chores like mowing the grass,” Davis says. “In addition to ongoing chores, younger roommates can help with house maintenance such as painting, cleaning the gutters, and so on—although some kind of compensation may be in order.”

Taking in a roommate may be just as good for your health as it is for your wallet. Arthur Bretschneider, CEO of senior housing marketplace Seniorly.com, says retirees often end up isolated after their spouses pass away or the people in their social networks start to age. But having a good social support system can have a significant positive impact on health and well-being.

“A roommate can reduce feelings of social isolation and perhaps provide a new and enduring friendship,” Bretschneider says.

Cons

Of course, inviting a new person to live in your home is a serious decision. Bretschneider says to exercise caution to protect yourself and your home.

“It’s important to remember, though, that not all roommates are good ones, and all contractual arrangements should have an escape clause should things not work out,” he says. “Every potential roommate should be evaluated with background checks and considered with a long-term living situation in mind.”

An ideal housemate isn’t just someone to pay half the bills. Burkhardt says to be very specific about what you’re looking for in potential roommates.

“If you’re retired, you may want someone who works during the day and isn’t around all of the time,” she says. “Or, it may be important that they’re tidy, share similar hobbies, or keep the same hours as you.”

She also recommends meeting potential housemates in person to assess your compatibility. And no matter how well you hit it off, protect yourself from a legal perspective with a rental lease and a security deposit to cover any damages to your property.

“Rather than entering into a one-year lease off the bat, consider starting with a three-month trial period to get to know your housemate and determine if you’re compatible,” Burkhardt says. “If things go well, you can easily renew for a longer period.”

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